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Does bonus affect unemployment compensation?

Q. I was recently laid off and received severance pay, which I reported to the state unemployment office. In early 2009, I then received a Christmas year-end bonus from my former employer. Does this affect my unemployment claim and must I report it?

A. I am sorry to hear that you were laid off and suffered a job loss. I am thankful though to learn that you received severance pay. Not all companies are providing severance pay to laid off employees.

In Massachusetts, unemployment compensation is typically available to workers who have lost their job through no fault of their own. Right now, unemployment compensation has been extended and is available up to a maximum of 59 weeks because of a federal extension of these benefits. The state makes the final determination regarding eligibility for unemployment compensation. The current maximum weekly amount is $628.

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You should report all income to the state unemployment office, even if it was a holiday or year-end bonus. In most cases, if you have received severance or a bonus, this may delay or reduce your unemployment benefits. There is one exception though. If you signed a “release of claims” agreement, you may still be able to receive unemployment compensation for those same weeks that you are receiving your severance pay.

Additionally, the Division of Unemployment Assistance (DUA) verifies any and all earnings reported by you. The DUA will verify your self-reported information with your former employer to ensure that the income reported is accurate. It is important to disclose any and all income completely.


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